what is the process of adjusting the supply of tokens by permanently deleting a certain amount to strengthen security or improve utilities?

1 year ago 87
Nature

The process of adjusting the supply of tokens by permanently deleting a certain amount to strengthen security or improve utilities is not a common practice in the token economy. However, there are some ways to control the supply of tokens, such as selling new tokens to the market or buying out tokens from the market. The supply of tokens can be controlled to a higher degree than demand. Token supply modeling is an essential aspect of tokenomics, and it can help companies to attract and retain top talent, reduce operating costs, and prevent market fluctuations. In general, utility tokens are used to enable the usage of a particular service, serve as an internal currency in the tokenized ecosystem, or represent a tokenized loyalty point. The natural demand-supply equation makes constant corrections to the value of any one utility token, and if the utility token appreciates a lot, it can result in the product or service being seen as being too expensive, so the demand will drop. Therefore, the fundamental difference between security and utility tokens affects the initial coin offerings.